World Bank October 2020 Report Says China Economy to Grow by 7.9% in 2021
Non-US global investors looking for returns and growth in 2021 should look at the China market.
Foreign investors looking for performance and opportunities next year should start preparing for a return to China – the latest World Bank Asia Pacific Region economic forecast has predicted a two percent growth rate for 2020 and 7.9 percent in 2021.
That is in stark contrast to the economies of its regional neighbors that are forecast to contract, the World Bank has stated.
“While China is forecast to grow by 2.0 percent in 2020 – boosted by government spending, strong exports, and a low rate of new COVID-19 infections since March, but checked by slow domestic consumption – the rest of the EAP [East Asia and Pacific] region is projected to contract by 3.5 percent,” the report read.
The World Bank said that this year’s growth rate for the entire EAP region, at 0.9 percent, will be the slowest since 1967. The report attributed this slowdown to the ripple shock of the pandemic, the economic impact of shutdowns, and the ensuing global recession.
China’s economic growth had been decelerating before the onset of the pandemic and the nation’s populace was transitioning into the middle-class, while neighbors in Vietnam and the Philippines looked set to take on the mantle of manufacturing powerhouses with cheap labor.
“We have been seeing increasing numbers of United States investors flocking to Vietnam,” says Chris Devonshire-Ellis of Dezan Shira & Associates. “However these are largely sourcing businesses and manufacturers impacted by the US-China Trade War and looking at alternative markets to export from. For them, establishing operations in Vietnam makes complete sense. But with China’s economic growth and middle-class consumer dynamic expanding, it also makes sense for suppliers and manufacturers to be looking to the China market as well.”
The East Asia Pacific region has largely kept the pandemic from worsening, unlike Europe and the Americas, which is considered a huge potential advantage over competitors in the West, with long-term implications for greater investment into Asia.
A copy of the World Bank report can be downloaded here.
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